Filling the financial gaps in Medicare coverage

If you already have Medicare, you know that the coverage is valuable, but it is far from free health care.

If you already have Medicare, you know that the coverage is valuable, but it is far from free health care.

Medicare charges substantial premiums, can require you to pay part of the cost of some services and does not cover a number of other services at all. That's why many seniors have some kind of supplemental coverage, either from a private Medicare supplement (Medigap) plan or from a former employer.

Others join Medicare Advantage plans that offer some limits on what you have to spend for health services out of your own pocket, though these plans can charge extra premiums and usually restrict what doctors you can see.

But paying for health care is especially challenging for people with limited incomes. Despite the rhetoric we sometimes hear about seniors being wealthy, in reality, there are not all that many Warren Buffets out there. About half of people with Medicare have incomes below $22,000 a year. For them, even routine Medicare premiums and health-care costs can be a real financial burden — and an unexpected expense can be devastating.

So it's important to know that help is out there if you or someone you know has Medicare and has limited financial resources. Here are some of the main programs designed to help people with Medicare afford health care:

The Part D Extra Help program, run through Social Security, can cover most or all of your Part D prescription drug costs. You can learn more and apply online at the Social Security website, socialsecurity.gov/prescriptionhelp. Medicare Savings Programs run through each state's Medicaid agency can cover your Medicare Part B premium ($104.90 per month in 2013), and, depending on your income, can cover your Medicare cost-sharing, as well. People with low incomes or high health care expenses may be eligible for their state's Medicaid program, which covers a number of services that Medicare does not.

You'll want to talk to a local counselor in your state to help you find out more. You can call 800-MEDICARE and ask for a referral to your local State Health Insurance Assistance Program or go to familiesusa.org/resources/program-locator and click on your state.

Among those who qualify for some of these programs, as many as two-thirds are not enrolled and many don't even know they qualify. The names of the programs can vary from state to state, and some states also have programs of their own, so talking to a local counselor can really help. And unlike the rest of Medicare, these programs do not have specific enrollment periods, so you can apply for help at any time.

Like most things in life, these programs are good but not perfect. If you can find help, it may be limited and may still leave you with significant out-of-pocket costs. Eligibility for many of these programs is also tighter than it ought to be. Income limits are generally low: In most states, individuals with incomes over about $15,500 a year and couples above $23,000 a year have a hard time qualifying, although a few states have adopted more generous standards.

Most programs also limit the value of financial assets like savings and retirement accounts you can have to less than $14,000 for an individual (about $27,000 for a couple). Keep in mind that things like your house and car usually don't count, however, and some states allow you to have more savings.

The programs available that serve low-income people with Medicare can make a real difference in the lives of millions of seniors. But there's no doubt they need to improve, both in enrolling people who are already eligible and in offering better coverage. In the meantime, however, if you or someone you know has Medicare and is struggling with health care costs, it's worthwhile to see if you're getting all the help for which you qualify.

Ron Pollack is executive director of Families USA.

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